Federer, the 16-time Grand Slam winner, was knocked out of the Australian Open 7-6 (3), 7-5, 6-4 Thursday by 2008 champion Novak Djokovic.

Nadal was aiming for his fourth straight Grand Slam win and Federer was going for his fifth Australian title. Instead, Nadal was eliminated by fellow Spaniard David Ferrer and Federer is heading home.

Djokovic will face Andy Murray or Ferrer in the final — they play on Friday.

"I'm looking forward to watching that match tomorrow from my bed with some popcorn," Djokovic said. "David played a fantastic match against Rafa even though Rafa was struggling obviously with injuries.

"They are in top shape. Andy has been in top shape on this court. It's a Grand Slam final, anything can happen. I believe in myself."

Earlier Thursday, Li Na and Kim Clijsters advanced to women's final on Saturday.

Li became the first Chinese woman to advance to a singles final at a major, fending off a match point in the second set for a 3-6, 7-5, 6-3 win over top-ranked Caroline Wozniacki.

Federer's loss marks the first time since 2003 that he won't hold any of the four major titles. It's also the first time Nadal or Federer won't be in a Grand Slam final since the Australian Open in 2008, when Djokovic beat Jo-Wilfried Tsonga.

The finals scenario could open the door for Murray to become the first British Grand Slam singles champion since Fred Perry in 1936. The final is Sunday night at Rod Laver Arena.

It is the second straight Grand Slam in which Djokovic has knocked Federer out in the semis. At last year's U.S. Open, the Serbian player saved match points before beating Federer in five sets to advance to the final against Nadal.

"It's really one of the best matches I've played in a while," Djokovic said.

The last time Federer was beaten in straight sets in a Grand Slam tournament was here in 2008 — against Djokovic.

Federer won 11 of 14 points to come back from a service break down to take the lead in the second set after the two traded booming forehands and chip backhands during the opening set. But Djokovic broke back in the second set and took his powerful strokes into the third set to win in an even three hours.

It was the 20th meeting of the pair, with Federer holding a 13-7 edge.

Li's bubbly off-court personality and her steady play have won her legions of new fans, particularly in her native China. It might even earn her a Grand Slam singles title.

"This is good experience for my whole life, because many players, they play a long time, but they never play the final for a Grand Slam," Li said.

Clijsters says she'll use her previous appearances in finals to her advantage. She's won three U.S. Opens, including two since she returned from retirement after getting married and having a child.

"I guess I've been on tour for a while and I've played big matches and not always won them," Clijsters said. "Although I've lost them sometimes, they really do teach you a lot of things."

For the past 10 days, Li has regaled the crowds and television audiences with her wit, joking about the snoring of her husband and coach, Jiang Shan, credit card spending, her mother's reluctance to watch any of her matches.

Her win was big news in China, where television commentator Xu Chang said Li had raised the profile of Chinese tennis, which has long struggled for recognition next to badminton and table tennis.

"Li has realized the dreams of all those promoting Chinese tennis," Xu said.

The official Xinhua News Agency said a Grand Slam win by Li "would also inspire a rush of new tennis players in China."

Li beat Clijsters in the final of the tuneup event at Sydney, where she came back from 5-0 down in the first set to win it in straight sets.

Wozniacki, playing at a major for the first time with the No. 1 ranking, had match point at 5-4 and 40-30 in the second set before Li rallied. Another 66 minutes later, Li served and won on her first match point.

Li lost to Serena Williams in two tiebreak sets in the semifinals here last year in her previous best run at a major.

Her trip to the final is just another first for Li, who was the first Chinese player to win a tour-level title and the first to enter the top 10. She is also the first player from Asia to reach a Grand Slam singles final.

"I'm so happy I can be the first Chinese player to come to a final — I always do the first one!" she said.

Asked what motivated her comeback, she deadpanned: "Prize money."

Wozniacki ensured she'll retain the No. 1 ranking by reaching the semifinals after coming back from a set and a break down to beat French Open champion Francesca Schiavone in three sets.

"Sometimes in matches or in tennis it's one ball that can change everything," Wozniacki said. "I didn't get my match point.

"Right now I'm sitting here and I wish I would have won the match. It's quite difficult to get through this one. I just need to get back on the practice court and keep working hard. Hopefully I'll get many more chances in the future.

Federer had similar comments after his match.

"It's not the end in any way," he said. "Sure, it's disappointing and it hurts in the moment itself. I wish I could have won here again for the fifth time.

"But that's sometimes how it goes. Doesn't mean the guy that doesn't win the tournament can't play tennis. That's sometimes how things are portrayed. I had a great season last year, and I think I'll have another one this year."